ISDA, the Alternative Investment Management Association, the European Association of Co-operative Banks, the European Banking Federation, the European Fund and Asset Management Association, Invest Europe, the Managed Funds Association, and the Nordic Securities Association have asked for a permanent exemption from margin requirements for equity options from the European Market Infrastructure Regulation (EMIR) margin requirements.

Equity options play a significant part in the real economy. Imposing variation and initial margin requirements on these instruments would increase funding costs and operational complexity and could result in smaller EU counterparties ceasing to use equity options for hedging and risk mitigation purposes.

In addition, given some major jurisdictions are permanently exempting equity options from margin requirements, EU market participants would face a clear competitive disadvantage when dealing with non-EU counterparties.